Further pressure will only be counterproductive

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".

The U.S. Commerce Department, citing concerns about national security, announced on Friday that five Chinese entities, including Sugon and the Wuxi Jiangnan Institute of Computing Technology, would be added to a list of entities prohibited from purchasing components from American suppliers starting June 24. This unilateral sanction follows on the heels of the move to add Huawei’s name to the same list.

[File photo: VCG]

The main business of the Chinese companies added to the export control list is the development of supercomputers. According to a recent ranking of the world’s top 500 supercomputers, there are 219 Chinese supercomputers on the list, making China the country with the largest number of computers listed. The Sunway Taihu Light supercomputer took third spot on the list, and Tianhe-2A took the fourth. The American-built Summit supercomputer might be in the top spot, but out of the 500 listed, only 116 are American. There is fierce competition between China and the United States in the supercomputer arena, as they play a major role in promoting industrial development. Building supercomputers requires a slew of high-end technologies. The United States was keen to add these five companies to the export control list in the belief that it would sever vital supply lines and undermine their ability to innovate, which in turn would stifle China’s technological and economic advancement. The same logic applied to the American attempt to cripple Huawei and its development of 5G technology.

Despite these attempts at technological sabotage, China retains an enviable position. It is home to more than 170 million people with a higher education. It’s the world’s second-largest spender on research and development. It is the source of the largest number of patent applications and approvals. And it has a comprehensive industrial chain that is closely tied to the world’s supply lines.

All that’s not to say China isn’t interested in finding a way to resolve the ongoing trade dispute with the United States. But the desire for a deal is tempered by the firm belief that it should be one made between equal partners and that accommodates the legitimate concerns of both sides. The United States should treat Chinese companies fairly, because if their legitimate interests are harmed, China will reply with countermeasures against foreign firms that don’t follow market principles, that violate the spirit of contracts, or that discriminate against Chinese firms for non-commercial reasons.

With President Xi Jinping and President Donald Trump preparing to meet again during the G20 summit in Osaka a week from now, the American side has clearly decided to heap more pressure on China in order to gain more bargaining chips for future trade and economic consultations. When taken together with the remarks made by U.S. Trade Representative Robert Lighthizer that he hadn’t heard of a better idea than tariffs, it is increasingly clear that the United States is insincere when it says it is looking for a resolution to the ongoing tensions. This latest move violates the consensus reached by the two presidents in Argentina at the end of last year, and it is not in keeping with the messages conveyed during their recent phone call.

The attempts by the United States to put pressure on China, whether it’s to give itself a tactical advantage in future trade talks or to strengthen its strategic position in the world by hindering China’s technological or economic development, will end in failure. Worse still, they will harm the interests of both countries and the wider world.